Voluntary carbon markets fail to maximize the greenhouse-gas (GHG) emissions they could offset. A new article published in the journal Science argues that most of the trade in credits to counterbalance climate change-inducing carbon dioxide (CO2) focus on forestry, which only allows for capturing the potent GHG in tree growth. But this approach misses other prominent GHGs, such as methane and nitrous oxide (NOx), which contribute to more than 50 percent of climate impacts. Of all the credits purchased in the last 25 years, only 2 percent have accounted for methane and nitrous oxide.
Lead author Ruth Defries, an Ecoagriculture Partners board member and founding dean of Columbia University’s Climate School, and her colleagues outlined ways to build better voluntary carbon markets and achieve net-zero emissions. Improved approaches are critical because many companies have pledged to reach such targets by 2050.
A voluntary carbon market is a system in which companies can pay to offset their emissions. For example, company A may purchase carbon offset credits from company B, which planted trees that absorb the same amount of carbon that company A is emitting.
“We wrote this paper to think through what improvements are needed to increase the integrity of offset credits, to ensure they are a part of the solution towards reducing emissions,” Defries says.
Defries highlighted the need to build an unified global carbon market. All stakeholders must cultivate trust, from investors to farmers and forestry managers. Agriculture and forestry industries together could meet global emissions reduction goals over the next decade.
To truly offset emissions that include methane and NOx, carbon market projects need to also focus on decreasing those GHGs in livestock, irrigation and agricultural practices while providing incentives for local participation in the markets.
Project managers need to adopt practices that promote sustainable agriculture and healthy ecosystems. Forecasts show that these holistic landscape restoration projects can significantly reduce atmospheric GHGs, with estimates that up to 60 percent of emissions from agriculture and 110 percent of emissions from the forestry sector can be reduced. This change in approach could be a game changer for voluntary carbon markets and climate-change mitigation.
Defries and her colleagues explained that 84 percent of agricultural landscape practitioners worldwide are smallholder farmers and indigenous communities. These two groups alone manage a quarter of the earth’s lands, which means they hold the power to increase GHG sequestration significantly. Yet, they remain at a disadvantage in participating in carbon markets. “Ensuring local involvement and local benefits is paramount to improving the integrity of the land sector in the carbon market,” she says.
When global carbon markets promote local participation and generate local benefits, they are most effective at reducing GHG gas emissions. Defries said a case study in Southern India highlights what successful long-term engagement with carbon markets can mean to locals. Nearly three decades of work by an organization called ADATS has helped households earn income by selling carbon credits for their sustainable agroforestry projects.
“Another way these households benefit is by switching from fuel wood to biogas, which decreases deforestation,” she says. “Studies have also shown that these households have improved nutrition. These are just some of the many benefits to this system.”
Of course, local benefits are not the only goal of an effective carbon market. The world needs these carbon credit-based projects on a global level to address climate change by achieving the GHG reductions that can mitigate the most severe impacts. But making these carbon markets more effective is a major challenge.
But Defries sees opportunities in the land sector and voluntary carbon markets. “Whether those opportunities are realized is very much a function of how standards get developed and implemented,” she says. “So it could either be a great benefit to reducing emissions and development or it could be harmful by displacing people with insecure land-tenure rights. It could go in multiple directions depending on how these processes are implemented. Carbon markets are kind of a Wild West right now.”